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Brandon and Lise* own their home and an investment property. With a solid income history, they were shocked when their bank declined financing on a second investment property.

They'd recently used their credit cards and a non-secured line of credit to pay for renovations on the first rental, Michelle Kelly explains.

With her advice, they refinanced the rental property to tap into the new equity they'd created through the renovations, using the funds to pay off the higher interest reno debt and top up their down payment on the new property. The move improved their cash flow – and made it possible to qualify for a mortgage on the new property.

"They were over the moon," she says.

Michelle Kelly is a mortgage broker with Xeva Mortgage in Squamish, B.C.

*Homebuyer names have been changed to protect privacy.

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